NEW DELHI: Aberdeen Asset Management, a global investment
management group which manages assets for both institutional and retail
clients from offices around the world, sees India as a better long-term
investment destination than China.
"We take a very long-term view on India given the fact that the macro environment is challenging and we do not anticipate any great rebound in growth coming through; certainly not before the election," said James Thom, Investment Manager, Aberdeen Asset Management in an interview with ET Now.
"We are simply looking at Indian companies relative to companies that we see elsewhere in Asia; and are judging them to be better quality companies with more exciting long-term prospects ... relative to companies we find in China for example, India for us still feels like a better long-term investment destination," he added.
On a net basis, we are a buyer on Indian equities, says Thom, but we have not increased our overall exposure to India within our regional portfolios. We have been buying just to maintain our position there, he added.
For the near term, Thom feels that Indian markets might remain rangebound, not anticipating any major or meaningful economic reform prior to the elections.
"On the contrary, what worries us is that the wrong sorts of policies get pushed through in the run-up to the elections; and by that I mean sort of populist policies that could ultimately prove detrimental to a long-term economic growth and put greater pressure on the government's balance sheet," he opined.
Tough structural reforms that are crucial to kick-start the economy will be very difficult to push through in the run-up to the general elections, due latest by May 2014, say analysts.
"Certainly there is a huge risk that as we head towards the elections, at the latest in April next year, the reform agenda could take a back seat and the government goes for populist policies and postpones some of the tough decisions, which could weigh on market sentiment," said Clive McDonnell, Head Equity Strategy, Standard Chartered in an interview with ET Now.
"However, from a valuation point of view, India is still in the expensive zone, but not as expensive as it was back in the second quarter of this year," added McDonnell.
PREFERRED BETS
Indian markets have been volatile so far in the year 2013. The S&P BSE Sensex managed to bounce back in September, gaining nearly 7 per cent as compared to 2.4 per cent return so far in the year 2013, as of data collected on September 26.
Aberdeen Asset Management is positive on IT sector, but given that the sector has already run-up recently on the back of a sharp depreciation in the rupee it is time investors can look at booking profits.
Our balance probably is towards the banking sector at this point as valuations for IT services companies are pretty high, although they have done fantastically well, says Thom. TCS is up 50-55 per cent year to date, while Infosys is up nearly 30 per cent supported by the fall in currency against the US dollar. Infosys is trading slightly cheaper than Tata Consultancy Services
"We take a very long-term view on India given the fact that the macro environment is challenging and we do not anticipate any great rebound in growth coming through; certainly not before the election," said James Thom, Investment Manager, Aberdeen Asset Management in an interview with ET Now.
"We are simply looking at Indian companies relative to companies that we see elsewhere in Asia; and are judging them to be better quality companies with more exciting long-term prospects ... relative to companies we find in China for example, India for us still feels like a better long-term investment destination," he added.
On a net basis, we are a buyer on Indian equities, says Thom, but we have not increased our overall exposure to India within our regional portfolios. We have been buying just to maintain our position there, he added.
For the near term, Thom feels that Indian markets might remain rangebound, not anticipating any major or meaningful economic reform prior to the elections.
"On the contrary, what worries us is that the wrong sorts of policies get pushed through in the run-up to the elections; and by that I mean sort of populist policies that could ultimately prove detrimental to a long-term economic growth and put greater pressure on the government's balance sheet," he opined.
Tough structural reforms that are crucial to kick-start the economy will be very difficult to push through in the run-up to the general elections, due latest by May 2014, say analysts.
"Certainly there is a huge risk that as we head towards the elections, at the latest in April next year, the reform agenda could take a back seat and the government goes for populist policies and postpones some of the tough decisions, which could weigh on market sentiment," said Clive McDonnell, Head Equity Strategy, Standard Chartered in an interview with ET Now.
"However, from a valuation point of view, India is still in the expensive zone, but not as expensive as it was back in the second quarter of this year," added McDonnell.
PREFERRED BETS
Indian markets have been volatile so far in the year 2013. The S&P BSE Sensex managed to bounce back in September, gaining nearly 7 per cent as compared to 2.4 per cent return so far in the year 2013, as of data collected on September 26.
Aberdeen Asset Management is positive on IT sector, but given that the sector has already run-up recently on the back of a sharp depreciation in the rupee it is time investors can look at booking profits.
Our balance probably is towards the banking sector at this point as valuations for IT services companies are pretty high, although they have done fantastically well, says Thom. TCS is up 50-55 per cent year to date, while Infosys is up nearly 30 per cent supported by the fall in currency against the US dollar. Infosys is trading slightly cheaper than Tata Consultancy Services
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